Like there's no tomorrow

The Sydney Morning Herald

November 22, 2008

East Timor has gone on a spending spree to try to buy civil peace, but it's stirring its own unrest. Lindsay Murdoch reports from Dili.

Joni Marques can't believe his luck. "Kill them all," he yelled to his militia subordinates on September 25, 1999, precipitating the massacre of nuns and priests in one of the more heinous crimes in the aftermath of East Timor's vote for independence from Indonesia.

Sister Erminia knelt and prayed as she was slashed with a machete. She was then thrown into a river and shot twice. Petrol was poured over three of the car's passengers and they were set alight. As one ran, Marques shot him dead. Another was tied to a tree and mutilated.

Indonesian-trained Marques, who claims to have acted on the orders of unnamed Jakarta generals, pleaded guilty at a United Nations tribunal in 2001 and was sentenced to 33 years' jail. But in June, to his surprise, Marques received a presidential pardon and is now the beneficiary of an unprecedented spending binge by the coalition Government in Dili.

When released from jail, Marques went to live with his wife in a Dili refugee camp. That made him eligible for up to $US4500 ($7339) - a payment from the Government to families that agree to leave the camps. Marques couldn't believe his luck again.

Because his wife is a public servant, Marques's family receives free rice each month. She's also about to receive a month's salary as a Christmas bonus. And now Marques and his family live rent free in a house built with foreign aid. There seems no end to his good fortune, particularly measured against his past.

The Herald interrupted Marques's afternoon nap and found that the contrast was not lost on him, either. "I don't want to talk about my life because people might take things away from me," Marques says.

Six years after gaining independence, East Timor's Government has thrown away the rule book for developing nations and is spending some of its oil and gas wealth that had been earmarked for future generations. Since 2005, its budget has increased 450 per cent to $US800 million, mostly in the name of peacemaking.

"We had to make policies to buy peace," said the Prime Minister, Xanana Gusmao, in a recent interview.

Most of the 100,000 refugees forced from their homes amid the 2006 violence have taken the Government's money and gone on spending sprees. Motor bikes and cars jam pot-holed streets, and DVDs and televisions are emptying out of stores.

The Government's largesse is spread throughout the half-island country. People aged 55 or older, most of whom have only ever lived in hand-to-mouth poverty, get a pension of $US20 a month - unheard of in most developing nations.

Every village chief's office is getting a satellite television: every village one or two hand ploughs; every police station a new computer and laser printer. Hundreds of Timorese students will study overseas on government scholarships.

Disgruntled soldiers sacked in 2006 for striking have each received $US8000 to peacefully return to their villages. Soldiers and police are wearing new uniforms and equipment. Politicians have new laptops and vehicles.

In the past four months, the Government has spent $US58 million on making rice more affordable for the poor. Government workers are sweeping once rubbish-strewn streets. There are plans for a $US250 million five-star resort hotel, a new parliament house on Dili's outskirts, a Singapore-style shopping mall and a luxury boat marina.

Trees are being planted, parks are being created and restaurants are opening. The Government has awarded scores of contracts totalling more than $US130 million for roads, schools and clinics. Ministers justify dipping into the $US4 billion petroleum fund established in 2005 by saying Timorese have a right not to live in poverty, even if the prosperity of future generations suffers.

But Fretilin, the main opposition party that ruled the country until elections last year, is attacking the spending. "The Government thinks everything can be solved by throwing money at problems," said the former prime minister Mari Alkatiri, Fretilin's secretary-general. "They have an incapacity to manage the money - they are blowing it for nothing."

Alkatiri, who is locked in unquenchable mutual loathing with Gusmao, a former Fretilin leader and war hero, says: "After our 24-year struggle for independence, they are just creating a culture of dependency at a time the Government should be focusing all its efforts on creating jobs, educating the young and providing services like health and sanitation."

Sixteen opposition MPs challenged the spending in the Constitutional Court and won, escalating political tensions in Dili. Gusmao made no secret of his contempt for Portuguese judges who ruled that doubling the budget this year was illegal because the Government had not given Parliament a good enough reason for doing so.

His Government disputes Fretilin's interpretation of the ruling and insists its actions have been lawful. But if the ruling is upheld, the Government will have $US390 million less to spend and, from its point of view, that threatens to renew civil unrest.

Concerns about the spending go to other issues of fiscal rectitude. Mario Carrascalao, an elder statesman and member of the governing coalition, says the way the Government is awarding contracts is open to corruption.

Alkatiri is more blunt. "There is corruption," he says. "We have facts and will soon reveal them."

Carrascalao insists on overseeing the awarding of contracts if he is to accept Gusmao's invitation to serve as one of two deputy prime ministers. "The practice of single-source tendering has to be stopped immediately," he says.

Most concern is over the clandestine $US400 million contract to the China Nuclear Industry 22nd Construction Company to install two heavy oil power plants, which are originally from the Three Gorges dam. Analysts say these plants do not meet even Chinese environmental standards.

The Dili-based La'o Hamutuk, a non-government organisation, claims East Timor is without the resources needed to keep the apparently second-hand plants operating, let alone ensure they run cleanly and safely.

Critics want to know if the company was given preferential treatment in return for China spending tens of millions of dollars building East Timor's foreign ministry building and presidential mansion.

The Government is under further fire for turning over to a little known Indonesian company more than a sixth of the country's arable land for a $US100 million sugar plantation and ethanol plant. Production of export ethanol could further threaten food security in this agrarian country.

Controversy also surrounds contracts for two Chinese-built patrol boats and a biodiesel processing plant by built by Enviroenergy Developments Australia. La'o Hamutuk says the latter project violates a law prohibiting foreign companies buying East Timor land and relies on standards unenforceable in East Timor.

Among East Timor's elite and business foreigners in Dili there is an emerging consensus that East Timor is at a crossroads. Potentially volatile issues are unresolved. The police force is dangerously divided and the military is badly run, while a sort of peace is maintained by 1500 United Nations police and about 800 Australian and New Zealand soldiers.

Inflating rumour is the absence of public explanation of motives and organisation of the attacks seven months ago on East Timor's top political leaders - Gusmao and the President, Jose Ramos-Horta, who was shot by rebel soldiers, with life-threatening consequences.

Angelita Pires, the Timor-born Australian lover of the rebel leader Alfredo Reinado, who was killed in the attack on Ramos-Horta, is being held in East Timor without charge, while 22 of Reinado's men are in jail awaiting action.

Ramos-Horta says people should not mistake civil calm and smiling faces as proof of the consolidation of peace. "Peace remains fragile," he says. A Nobel Peace-Prize winner who became prime minister at the height of the 2006 upheaval, Ramos-Horta knows that the roots of his country's problems are buried partly in battles and betrayals in the decades before the 2002 independence.

On Wednesday evening at his waterfront office in Dili, Ramos-Horta told a small group of government officials, diplomats and other guests the time had come to try to bring warring political leaders together, particularly emerging leaders. He signed an agreement that will allow mediators from the Geneva-based Centre for Humanitarian Dialogue to establish a permanent secretariat in Dili to "facilitate informal dialogue between the country's leaders on issues identified by them as being of national importance".

The centre laid the groundwork for peace in Aceh and for more than 12 months discreetly attempted to mediate a peace deal with Reinado and the disgruntled former soldiers. Some diplomats in Dili are sceptical the organisation will be able get Gusmao and Alkatiri to bury the hatchet. Previous attempts have failed to resolve their hatred but they at least can talk with each other in both public and private, acquaintances say.

Alkatiri says success of dialogue "depends on whether everybody is willing to co-operate".

Ramos-Horta sought the Centre for Humanitarian Dialogue's permanent presence, he says, because it could bring ideas that could help draw leaders together, particularly emerging leaders.

Carrascalao says reconciling bitter enemies will be difficult. "The political elite here is less than 100 figures - a very small number. Mari Alkatiri and Xanana Gusmao will have to be sincere in searching for common ground … it won't work if they embrace publicly and then start playing games behind each other's back."

East Timor, Carrascalao says, must foster a new generation of leaders who do not carry the past's bad blood. "Any solution must also involve the Catholic Church, the most credible institution in the country."

A 30-minute drive west from Dili along a winding road that hugs the coast, Marcelino Roza is ending a 15-hour day filtering water through mud and then boiling it to obtain salt. Helped by his eight children, the 52-year-old needs days to collect a small bucket of salt, which he sells for $US6.

"I thought when independence came my life would be improve," Roza says. "I hear other people are getting benefits but we have got nothing. Please tell the Government people to be fair to all of us. I cannot earn enough to feed my family. Life is very hard."

Lindsay Murdoch, the Herald's Darwin correspondent, is a veteran reporter on East Timor.

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